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The government has waived off the penalty for delayed filing of initial returns under goods and services tax (GST) for August and September, giving a major relief for small and medium enterprises (SMEs), which are the most affected by the hasty implementation of goods and services tax (GST) GSTR-3B. Not just that, those who have paid the late fee will be credited it back.

Businesses have not been able to file returns due to a myriad of reasons including slowing down of the information technology (IT) backbone, GST Network (GSTN). A late fee was charged, which was in most cases more than the company’s tax liability, according to a press report.

The government had earlier waived late fee for delayed filing of the maiden returns for the month of July under the GST regime.

To facilitate taxpayers, late fee on filing of GSTR-3B for Aug&Sept has been waived. Late fee paid will be credited back to taxpayer ledger,” Jaitley informed.

The recent step has been taken keeping in view the convenience for traders and GST filers. In the initial rollout phase of GST, complaints of technical glitch have cropped up which the government has already worked upon to fix them.

On October 20, Ajay Bhushan Pandey who is Chairman of GST Network had said by noon that day as many as 33 lakh GST returns for September were filed. He had also informed back then that 75,000 sales data were being uploaded on the GSTN portal on an hourly basis.

The deadline for filing the initial returns in GSTR-3B for September under the Goods and Services Tax regime was October 20 midnight, news agency PTI had reported back then.

In an interview to PTI, Pandey had said the GSTN system was stable and was handling data at just 30 per cent of its capacity with 20 lakh returns being uploaded in past two days.

“As many as 33 lakh returns have been filed till noon. The pace of filing is picking up with an average 75,000 returns being uploaded on an hourly basis. GSTN system is stable. We hope more people are able to file return within the due date,” Pandey explained.

Businesses have been demanding that the government waives penalty for delayed filing of 3B returns.

As per the data, 55.87 lakh GSTR-3B returns were filed for July, 51.37 lakh for August and over 42 lakh for September. Preliminary returns GSTR-3B for a month is filed on the 20th day of the next month after paying due taxes.

As per the data with the GST Network (GSTN), a huge chunk of businesses file their returns after the expiry of the due date.

While only 33.98 lakh July returns were filed till the due date, the number has now gone up to 55.87 lakh. Similarly for August 28.46 lakh returns were filed till the last date, but the figure went up to 51.37 lakh later.

Also for September while 39.4 lakh returns were filed by the due date, the number is rising and was over 42 lakh till Monday.

The GST law provides for a nominal fee of Rs 100 per day on Central GST and an equivalent amount on State GST in case of late filing of returns and payment of taxes.

“The waiver of late fee on delay in filing GSTR 3B is a welcome step from the Finance Minister. Given that GST is a new law and tax payers are still getting used to it coupled with GSTN related issues, this waiver was clearly warranted,”

A four member standing committee, comprising tax officials of the Centre and states, has been set up to receive complaints of undue profiteering by any entity under the new goods and services tax (GST) regime.

The standing committee on antiprofiteering will act asacomplaint processing machinery and will refer any cases it finds fit for investigation to the Directorate General of Safeguards (DGS).

The setting up of the panel, with two officials of the Central Board of Excise and Customs (CBEC) and one each from Delhi and Haryana tax department, sets in motion the antiprofiteering clause under the GST.

The antiprofiteering mechanism was proposed to enable the benefit of lower taxation in the GST with the subsuming of overadozen central and state taxes like excise duty, service tax and valueadded tax and end to taxontax, is passed on to consumers.

Businesses or entities not passing on the benefit can be referred to the committee.

The detailed procedure for approaching the committees will be announced soon, officials said.

Revenue Secretary Hasmukh Adhia had last week said that the government has notified the ´standing committee´ comprising four officers —two each from the Centre and states —but the names of the officers were not in public domain.

According to the structure of the antiprofiteering mechanism in the GST regime, complaints which are of local nature would be first sent to the statelevel ´screening committee´, while those of national level would be sent to the ´standing committee´.

If the complaints have merit, then the respective committees would refer the cases for further investigation to the DGS.

The DGS would generally take about three months to complete the investigation and send the report to the antiprofiteering authority.

Although, the members of the antiprofiteering authority, to be headed byasecretarylevel officer with four joint secretaryrank officers as members, are yet to be finalised, Adhia had said adding that the authority would be in place by the time the DGS investigation on the complaints is complete.

The GST was rolled out from July 1 and the government has advised businesses to pass on the benefit of any cost reduction to buyers.

Recommendations made by the GST Council in the 21st meeting at Hyderabad on 9th September, 2017

The GST Council, in its 21st meeting held at Hyderabad on 9th September 2017, has recommended the following measures to facilitate taxpayers:

a)In view of the difficulties being faced by taxpayers in filing returns, the following revised schedule has been approved:

Sl. No.

Details / Return

Tax Period

Revised due date

1

GSTR-1

July, 2017

10-Oct-17

For registered persons with aggregate turnover of more than Rs. 100 crores, the due date shall be 3rdOctober 2017

2

GSTR-2

July, 2017

31-Oct-17

3

GSTR-3

July, 2017

10-Nov-17

4

GSTR-4

July-September, 2017

18-Oct-17 (no change)

Table-4 under GSTR-4 not to be filled for the quarter July-September 2017. Requirement of filing GSTR-4A for this quarter is dispensed with.

5

GSTR-6

July, 2017

13-Oct-17

Due dates for filing of the above mentioned returns for subsequent periods shall be notified at a later date.

b)GSTR-3B will continue to be filed for the months of August to December, 2017.

c)A registered person (whether migrated or new registrant), who could not opt for composition scheme, shall be given the option to avail composition till 30th September 2017 and such registered person shall be permitted to avail the benefit of composition scheme with effect from 1st October, 2017.

d)Presently, any person making inter-state taxable supplies is not eligible for threshold exemption of Rs. 20 lacs (Rs. 10 lacs in special category states except J & K) and is liable for registration. It has been decided to allow an exemption from registration to persons making inter-State taxable supplies of handicraft goods upto aggregate turnover of Rs. 20 lacs as long as the person has a Permanent Account Number (PAN) and the goods move under the cover of an e-way bill, irrespective of the value of the consignment.

e)Presently, a job worker making inter-State taxable supply of job work service is not eligible for threshold exemption of Rs. 20 lacs (Rs. 10 lacs in special category states except J & K) and is liable for registration. It has been decided to exempt those job workers from obtaining registration who are making inter-State taxable supply of job work service to a registered person as long as the goods move under the cover of an e-way bill, irrespective of the value of the consignment. This exemption will not be available to job work in relation to jewellery, goldsmiths’ and silversmiths’ wares as covered under Chapter 71 which do not require e-way bill.

f)FORM GST TRAN-1 can be revised once.

g)The due date for submission of FORM GST TRAN-1 has been extended by one month i.e. 31st October, 2017.

h)The registration for persons liable to deduct tax at source (TDS) and collect tax at source (TCS) will commence from 18th September 2017. However, the date from which TDS and TCS will be deducted or collected will be notified by the Council later.

The GST Council has decided to set up a committee consisting of officers from both the Centre and the States under the chairmanship of the Revenue Secretary to examine the issues related to exports.

The GST Council has also decided to constitute a Group of Ministers to monitor and resolve the IT challenges faced during GST implementation.

In a significant development, the government today decided to rejig GST rates for as many as 30 items. The decision was made at the GST Council meeting held in Hyderabad.

If GST was making you anxious about your small car buying plan this Diwali, there is some relief for you. Finance minister Arun Jaitley announced no change in tax for small cars.

“There will be no additional burden on small car buyers,” the FM said after the 21st meeting of the GST Council.

Jaitley said there will be a status quo on tax rates on 1200cc petrol and 1500 cc diesel cars. The council decided to increase to raise total tax on midsize cars from 43% to 45%. Tax on large cars was raised to 48% from 43%.

On SUVs, total tax would now be 50% instead of 43%. There was no increase in total tax on 13-seater vehicles.

Progress of implementation was on of the biggest issues before the GST Council, FM Jaitley told the media after the meeting.

The FM said overall GST collection has been quite robust at Rs 95,000 crore for July, with 70% of those registered already filing their returns.

The council reviewed the working of the GST network (GSTN), which had got overloaded on two or three occasions.

The deadline for filing GSTR 1 has been extended to October 10, Jaitley said. The original deadline was tomorrow, i.e. September 10.

The government decided to appoint a committee to ensure smooth transition to the new tax regime, Jaitley said.

The four key issues discussed in the meeting were- imposition of cess on cars, reduction of rate in aam aadmi goods, car leasing issues and new framework for trademark.

GST, the four-tier tax structure of 5, 12, 18 and 28 percent, came into force on July 1.

GST Council is a federal forum with both centre and states in India on board. It is made of the union finance minister (as Chairman), the union minister of state in charge of revenue or finance, the Minister in charge of finance or taxation or any other minister, nominated by each state government.

The GST council has decided that small traders with turnover below 20 lakh selling handicraft outside their state will not have to register.

With 60 per cent of the country’s small traders yet to be computerised, wholesalers and traders are demanding amnesty from penal provisions of GST for atleast nine months.

A large number of small traders are still not educated about GST and there are expected to be teething problem for them in the initial phase.

GST is expected to replace hand-written receipts as traders will need to maintain computerised records and file returns online. For that they will need to upgrade their existing business format and link digital payment with GST among other things.

“We are asking for interim period for general traders for whom so far no interaction has been initiated by the government and they are still unaware of nitty-gritty of GST. Since GST is a new thing for the trading community interim period will be best suited to bring more people under GST net,” said Praveen Khandelwal, Secretary General, Confederation of All India Traders ( CAIT).

He said that when VAT was introduced there was around three years as transition period. Khandelwal said that during the trial period no penal action should be taken against any trader for procedural lapses.

As per the GST Council decision, traders in the country with revenue above Rs 20 lakh have to register for GST. “Till now GST rules have not been completely been framed. There are many things in pipeline. Trading community across country need to be informed about GST and GST is entirely different kind of taxation system against current tax regime. So it is obvious that during its operations there may be procedure lapse by the trading community,” he said.

“Still 60 per cent of the small businesses in the country has not adopted computerisation which is a major challenge because GST is technology based taxation system,” he added.

The fear that three returns in a month and one annual return under the proposed Goods and Services Tax (GST) would make the whole process very cumbersome and compliance-heavy is unfounded and exaggerated, said Revenue Secretary Hasmukh Adhia in an interaction with media here today.

Explaining how filing returns would not be as cumbersome as it is made out to be, Adhia said that when a supplier uploads details of the sales invoices generated in the GST system, and files GST Return-I, the details from the suppliers GSTR-I automatically gets updated in the GST Return II (GSTR-II) of the purchaser. All the recipient needs to do is amend or modify and file the GSTR-II by 15th of every month.

By 17th of the month both the supplier and the recipient would have to reconcile the invoice details and file the third return (GSTR-III) by 20th of the month.

“So what looks like three returns in a month is effectively just one return, and the other two are taken care of with little efforts of the assessee” .

Under the GST, all registered taxable entities have to file three monthly returns and one annual return (see Table). The first return is for all the sales made by the taxpayer, the second one is for the purchases and the third monthly return is a composite return of all sales and purchases. So, in a year a total 37 returns have to be filed by assessees.

Tax experts and businesses have expressed their concern that three returns in a month would mean a huge compliance burden on taxpayers especially for small traders and SMEs.

E-commerce operators like Flipkart and Snapdeal will have to deduct TCS (tax collected at source) while making payments to their suppliers, according to the new model GST law, which has done away with the definition of ‘aggregator’.

Explaining the changes in the provision, experts said the proposal will increase the compliance burden on e-commerce operators as they will have to deduct 2 per cent TCS and deposit it with the government. The measure will not increase the incidence of taxation on consumers as the supplier will get tax credit for the TCS. The model GST law provides for 1 per cent TCS to be deducted by the E-commerce operators.

According to experts, this would mean that a similar amount will have to be levied on inter-state movement of goods, taking the total TCS deduction to 2 per cent although burden on consumers will not increase.

Mohan further said in case of return of goods by the consumer, the e-commerce companies will not have to deduct TCS as there is no actual sale.

The draft model GST law does not provide any definition of ‘aggregators’, saying that the government would later come out with a notification specifying which type of businesses would be covered under the term.

Aggregators mainly include Ola, Uber and UrbanClap which work as platforms for providing transport and other services. The TCS provision will not apply to aggregators.E-commerce companies will also have to file returns on the TCS deductions.The model law has defined ‘electronic commerce’ as supply of goods or services, including digital products, over electronic network.

‘Electronic commerce operator’ would mean those persons who own, operate or manage digital or electronic facility or platform for electronic commerce.